The Dubai index closed 0.8 percent lower, pressured by real estate and bank stocks. All six real estate stocks fell while Emirates NBD, the biggest lender, was the main drag on the index, shedding 2.1 percent.

DAMAC Properties fell 2.4 percent after saying it expects Dubai's real estate market to face another few quarters of "soft market conditions" before starting to rebound from late 2019.

Construction firm Drake & Scull closed nearly 1.0 percent higher but off the day's highs in heavy trade ahead of its shareholder meeting this Thursday, which is expected to discuss ways to strengthen the company.

Ajman Bank was up 2.0 percent as Wednesday was the last trading date for the company's shareholders to be entitled to its rights issue.

The Saudi Arabian index inched 0.3 percent higher, helped by banks and petrochemicals. Saudi International Petrochemical (Sipchem) rose 0.4 percent after signing a memorandum of understanding on a "merger of equals" with Sahara Petrochemical, which jumped 3.6 percent.

Sipchem would increase its share capital by 733.3 million shares, and each Sahara shareholder would receive 0.8356 new Sipchem shares. Sipchem said it expected to sign a final deal by February 2019.

Alujain Corp plunged 5.5 percent in heavy trade after it said a fire broke out at its affiliate National Petrochemical Industrial's plant on Tuesday, halting production.

The fire, which was brought under control, killed one worker and injured 11 in Yanbu province on the Red Sea, a spokesman of the Royal Commission for Jubail and Yanbu told Al-ekhbariya TV early on Wednesday.

Saudi British Bank and Alawwal Bank were suspended from trading pending news, according to an announcement on the Saudi stock exchange.

The banks agreed to a $5 billion merger in May to create the kingdom's third-biggest lender, but the agreement is still non-binding and subject to a number of conditions, including regulatory approval.

The Egyptian blue-chip index, dampened by continued weakness in emerging markets generally, fell 0.5 percent as all but six of its 30 stocks dropped. Eastern Co was the biggest drag, slipping 5.9 percent.

Qalaa Holdings rose 2.5 percent to 3.31 Egyptian pounds after brokerage Naeem placed a 'buy' rating on the stock with a target price of 4.16 pounds.